Tax planning is an essential part of wealth preservation when you want to protect your assets for your intended beneficiaries. The tax planning and succession planning solicitors at SCL Wills and Probate offer services to help you achieve your priorities and find the best solution for your specific situation. We can provide advice and guidance that is tailor made for your situation.
Proper estate planning is an effective way to minimise tax liability. Large estates are subject to inheritance taxes, but there are steps you can take to minimise the amount of tax that must be paid. During the process of estate planning and writing your will, we can provide advice to ensure that your assets are distributed according to your wishes, while reducing the amount that must be paid in taxes.
Creating an Estate Plan
Estates valued at more than £325,000 are subject to estate taxes. The first step is to estimate the value of your estate to get an idea about the estimated taxes that may be due. You should consider your home and possessions, savings accounts, stocks and investments, the value of your business, insurance policies, death benefits, and other assets to determine the approximate value of your estate. If your estate is worth more than the threshold, careful estate planning is necessary.
There are exemptions available to the inheritance tax that can be used to reduce tax liability. These include gifts to charities, gifts of up to £250 per person per year, gifts between spouses, gifts in consideration of marriage, and an annual exemption of £3,000. We can advise you about using exemptions for tax planning purposes.
The specifics of estate planning differ depending on whether you are married or not. If married, is this your first or second marriage? This is an important consideration, as there are unique challenges in second marriages when there are children from the prior marriage. You may want to preserve certain assets or direct more of your wealth to children that are not shared with your spouse.
Establishing Trusts
People choose to create trusts for many reasons. Some people create a trust to preserve assets for their intended beneficiaries and it may be possible to reduce tax liability with trusts. A trust can be used to prevent your former spouse from gaining control of your assets, if your children are minors.
If you are the trustee of an existing trust, our trust solicitors can help you handle the responsibilities of administration and tax compliance. We can advise you regarding investment of the money in the trust and giving money to the beneficiaries of the trust. Factors such as purchasing property, adding to the trust, gifts, death benefits, and other issues can change tax liability. We can provide the advice you need to make the best decisions.
Your estate plan, trusts, and will may need to be updated when there is a change in your situation. This may include marriage, divorce, the birth of children or grandchildren, and other major life changes. Our tax planning and succession planning solicitors can answer your questions, make suggestions, and guide you through the process.
